Coronavirus Food Assistance Program 2 Provides Additional Relief to Ag Producers

September 30, 2020 | Article

By Mike Schaefer

As part of the CARES Act, the U.S. Secretary of Agriculture established the Coronavirus Food Assistance Program (CFAP) to provide financial assistance to eligible agricultural producers impacted by the effects of the COVID-19 outbreak. In September, an expansion of the program was implemented, CFAP 2, which follows the first round of CFAP, with an application period of September 21 through December 11, 2020.

The impacts of COVID-19 and the various relief provisions are far reaching. We’ve developed resources to help.

What is provided in the Coronavirus Food Assistance Program 2?
Funding for CFAP 2, except for tobacco, will be provided under the Commodity Credit Corporation (CCC) Charter Act. CFAP 2 will provide up to $14 billion in direct support for agricultural producers of eligible commodities.

The CFAP is not a loan program therefore, does not need to be repaid. There is a maximum payment limitation of $250,000 per person or entity if all commodities are combined. As this is a separate program, this payment limitation is separate from the CFAP 1 payment limit. If approved, ag producers will receive 100% of the initial eligible payment.

What Commodities Qualify for the Program?
CFAP 2 payments will be split into three categories of commodities: price trigger commodities, flat-rate crops, and sales commodities.

Price Trigger Commodities that suffered a 5-percent-or-greater price decline in a comparison of the average price for the week of January 13 – 17, 2020, and the average price for the week of July 27-31, 2020 include barley, corn, sorghum, soybeans, sunflowers, upland cotton, wheat (all classes), broilers, eggs, beef cattle, dairy, hogs and pigs, lambs and sheep.

Flat-Rate Crops that either do not meet the 5-percent price decline trigger or do not have data available to calculate a prince change include, but are not limited to alfalfa, amaranth grain, buckwheat, canola, extra long staple cotton, crambe (colewart) einkorn, emmer, flax, guar, hemp, indigo, industrial rice, kenaf, millet, Khorasan wheat, mustard, oats, peanuts, quinoa, rapeseed, safflower, sesame, speltz, sugarcane, sugar beets, sweet rice, teff, triticale, and wild rice.

Sales Commodities include fruits and vegetables, aquaculture grown in a controlled environment, nursery crops and floriculture, tobacco, goat milk, mink, mohair, and wool.

For payment information on each of these commodity categories, visit https://www.farmers.gov/cfap.

Who Qualifies for the Coronavirus Food Assistance Program?
To be eligible for CFAP 2 payments, agricultural entities who have one of the commodities listed above must have experienced one of the following:

  • Suffered a 5% or greater price loss over a specified time resulting from COVID-19
  • Face additional significant marketing costs for inventories:
    • Price losses due to declines in certain types of demand
    • Surplus production or to disruptions to shipping patterns
    • Orderly marketing of commodities

The individual or legal entity must have an adjusted average gross of income of under $900,000 for tax years 2016, 2017 and 2018. If at least 75% of the adjusted gross income comes from farming, ranching or forestry-related activities, the $900,000 limit no longer applies.

Understanding your financial situation as an ag producer is more important than ever.

How Do You Apply for the CFAP?
Beginning September 21, the USDA, through the Farm Service Agency, will be accepting applications from agricultural producers who have suffered losses. Producers apply directly through their local FSA Service Center. The program will run through December 11, 2020.

If you are new to the USDA, you will be asked the following type of information to help you apply:

  • Name and address
  • Personal information, including Tax Identification Number
  • Farm operating structure
  • Adjusted gross income compliance certification. This will ensure eligibility.
  • Direct deposit information to enable payment

In addition, producers will need sales, inventory and other records in order to complete the application. However, CFAP is a self-certification program, so this documentation will not actually need to be submitted with the application.

A CFAP payment calculator has also been made available to assist with the applications.

Frequently Asked Questions on the CFAP 2
Is there a crop insurance or risk management requirement that must be met to qualify for CFAP 2?
Similar to CFAP 1, there is no requirement to have crop insurance coverage or coverage under the Noninsured Crop Disaster Assistance Program (NAP to be eligible for participation in CFAP 2.

Are seed commodities eligible for CFAP 2?
Seed commodities are eligible if the underlying commodity is eligible and at the underlying commodity payment category and rate. For example, seed potatoes and asparagus seed are covered under the sales approach while seed corn is a price trigger commodity. Clover seed is not eligible since the underlying commodity is not eligible.

When are CFAP 2 payments expected to begin?
FSA county offices will process applications as they receive them once the application period opens on September 21, 2020. Program approval is handled at the local level and the timeline for this approval process, including required internal controls and data validation, varies from county to county. Payments are made shortly after applications are approved.

Get Help Understanding the Impact of the CFAP
The CFAP is designed to help ag producers during a critical time. It also comes with specific criteria for eligibility. Knowing if you qualify and how to correctly fill out your application is important as ag producers take advantage of the extended program.

Want to know if you qualify for the CFAP 2?

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